O globalization process provided a series of technical and social transformations within the composition of the geographical space of different places on the planet. At the heart of these changes, the political-economic field was not exempt and also experienced the emergence of different facets and new configurations, among them, the change of perspective on the role of the state in the economy.
In this sense, it is important to consider the role of the state in globalization, especially with regard to the globalized economy and the financial system. Although it is not possible to generalize the role of public authorities in the functioning of economic globalization, we can say that there is a common trend followed by several countries, mainly under the tutelage of major international actors, namely: the United States, the European Union and the International Monetary Fund (IMF).
From the 1980s onwards, new discussions began to spread in this regard, intensified, above all, due to the effects generated in the context of the two oil crises that occurred during the decade previous. These crises are generally attributed to the excessive participation of the State in the economy, subordinating economic activities and political interests and preventing the practice of free trade.
For this reason - and also to contain the high public deficit existing in several countries -, several theorists and also economists linked to the United States, the IMF and the World Bank started a defense of the State's lesser role in the economy globalized. As a result, they began to proclaim, then, a lower participation of the government in investments, with less tax collection and the deregulation of financial markets.
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The general principle was to relieve the State of spending, making the public machine also have a lesser need to own collections, in what became known worldwide as the resumption of liberal values about the "Minimum State", a process called in neoliberalism.
The practical application of neoliberal ideas, including in Brazil, occurred through the following measures:
– privatization of state-owned companies;
– an end to excessive regulation of private companies;
– wide opening to the foreign market;
– taking measures to ensure the free functioning of the market;
– limitation on the role of unions and labor rights;
– reduction of the State's own expenses, including the reduction of expenses with social measures.
The diffusion of neoliberalism within the scope of the consolidation of globalization it generated a series of debates and analysis in the social and human sciences in general, with many advocates and also many critics. On the one hand, it is argued that this is the best form of economic development, as the State is an obstacle to the free market and social evolution; on the other hand, it is argued that neoliberalism culminated in the loss of labor rights, in the concentration of income and in the lower amount of public investment in health, education and others.
By Me. Rodolfo Alves Pena
Would you like to reference this text in a school or academic work? Look:
PENA, Rodolfo F. Alves. "Role of the State in Globalization"; Brazil School. Available in: https://brasilescola.uol.com.br/geografia/papel-estado-na-globalizacao.htm. Accessed on June 27, 2021.
